Norwich Union is introducing a protected guarantee for new investors in its with-profits fund, but it has been argued by the financial industry that it comes too late for existing investors. NU revealed that maturity values on its 25 year with-profits mortgage endowment policies fell from £54,130 to £48,889 on its CU (Commercial Union) fund, and from £47,087 to £45,338 on its Norwich Union fund, based on a 29 year-old male non-smoker paying premiums of £50 per month.
The protected guarantee offers a minimum return of the investment plus inflation if held for five years. There is no extra charge, but early exit penalties could apply if the money is withdrawn early.
Our view
At least NU are now looking to offer something.